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senate Bill S. 1524

Ending Tax Breaks for Professional Sports Leagues

Argument in favor

Professional sports leagues rake in extraordinary amounts of money. Tax-exempt status essentially allows these organizations to be subsidized by taxpayers.

Argument opposed

Professional sports leagues are the substance of the American pastime. Taking tax-breaks away from them could raise costs that will be passed on to fans.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedSeptember 18th, 2013

What is Senate Bill S. 1524?

This bill would remove professional sports leagues from the Internal Revenue Code’s (IRS) list of tax-exempt organizations.

Any professional sports organization — think the National Football League (NFL), the National Hockey League (NHL), or the Professional Golf Association (PGA) — that has annual revenue in excess of $10 million would be prevented from being classified as a 501(c)(6) tax-exempt organization.
To that end, S.1524 would not impact 501(c)(3) charitable organizations that professional sports organizations have established.

Impact

Professional sports fans, team players, coaches, and leagues, and the IRS.

Cost of Senate Bill S. 1524

A CBO cost estimate is unavailable.

More Information

In-Depth:

The National Football League (NFL) has recently come under intense scrutiny following numerous domestic violence scandals. This extra attention has led many to wonder why the NFL - and other professional sports leagues - are classified as tax exempt entities by the IRS.


In his Wastebook 2012 — a collection of critiques of Capitol Hill, through "examples of mismanagement, wasteful spending and special interest deals" — Sponsoring Sen. Tom Coburn (R-OK) estimates that removing tax-exempt status from the likes of the NFL and the NHL could raise at least $91 million in federal tax revenue annually.

This isn't too big of a cut if you consider that the NFL was a $9.5 billion business in 2012, and has only continued to grow. It is likely that the government would get significantly more revenue in the event this legislation passes. Another estimate shows that taxing the PGA’s $1.4 billion in revenue at the 35 percent corporate tax rate would yield approximately $300 million in federal tax revenue.


These sports leagues could soon be following the lead of their peers by becoming for-profit entities and paying corporate taxes. ABC News coverage of the NFL’s ongoing problems noted that the NBA has always operated as a for-profit business, and Major League Baseball gave up its tax-exempt status in 2007.


Media:

Sponsoring Sen. Tom Coburn (R-OK) Press Release

Fact Sheet from Sponsoring Sen. Tom Coburn (R-OK)

Bloomberg Businessweek

Roll Call

ESPN

Deadspin

(Photo Credit: Wikipedia)

AKA

PRO Sports Act

Official Title

A bill to amend the Internal Revenue Code of 1986 to exclude major professional sports leagues from qualifying as tax-exempt organizations.